Rent Determination Action

What Is an Action for Determination of Rent?

A rent determination action, is a type of action that may be brought by the landlord or the tenant, in which an increase or reduction of the current rent is sought.

The aim here is for the court to determine the new rent. If the parties agree on the amount of rent they have set for the new rental period, an action for determination of rent cannot be brought. The action may be brought only if the parties cannot reach agreement.

The relevant provision is set out in Article 344 of the Turkish Code of Obligations:

TCO art. 344provides: “Agreements of the parties on the rent to apply in renewed rental periods are valid provided that they do not exceed the rate of change in the twelve-month averages of the consumer price index in the previous rental year. This rule also applies to lease agreements with a term of more than one year.

If the parties have not made an agreement on this matter, the rent shall be determined by the judge in accordance with equity, taking into account the condition of the leased property, provided that it does not exceed the rate of change in the twelve-month averages of the consumer price index of the previous rental year. Irrespective of whether the parties have made an agreement on this matter, in lease agreements with a term of more than five years or renewed after five years, and at the end of every five years thereafter, the rent to apply in the new rental year shall be determined by the judge in accordance with equity, taking into account the rate of change in the twelve-month averages of the consumer price index, the condition of the leased property and comparable rents. The rent determined in this manner for the rental year following each five-year period may be changed in accordance with the principles set out in the preceding paragraphs.”

Turkish Code of Obligations, Art. 344

How Is the Rent Determined?

In determining the rent to apply in the new period, the term of the lease agreement is decisive:

Conditions of the Rent Determination Action

For an action for determination of rent to be brought, the 2 conditions below must be met; otherwise the action will be dismissed:

1. There must be a lease agreement between the parties. That agreement may be either written or oral; there is no requirement of writing.
2. The parties must have a legal interest in bringing the action.

Time for Filing the Action and Effective Date of the Rent

An action for determination of rent may be brought at any time. If the parties want the rent to be determined by the court to apply from the beginning of the new rental period, they must have brought the action for determination of rent at least 30 days before the new rental period or notified the other party of this matter in writing at least 30 days in advance. If this occurs, the rent determined by the judge will apply from the beginning of the new rental period. The Turkish Code of Obligations does not prescribe any time limit for bringing an action for determination of rent.

If the new rent is to apply in the new lease period, two conditions apply:

TCO art. 345 “An action for the determination of the rent may be brought at any time.”

“However, where such an action is brought at a date no later than thirty days before the beginning of the new period, or where the landlord has given the tenant written notice within that period that the rent is to be increased and the action is brought before the end of the following new lease period, the rent determined by the court binds the tenant from the beginning of that new lease period.”

Turkish Code of Obligations, Art. 345

Where the lease agreement contains no increase clause, the legislature requires one of two conditions — notice or action. In that situation the landlord may either bring an action for the determination of the rent no later than thirty days before the new lease period begins, or give the tenant written notice and bring the action before the end of the new lease period, in which case the newly determined rent will bind the tenant from the beginning of that period.

“Where the agreement contains a provision that the rent is to be increased in the new lease period, the rent determined by the court in an action brought before the end of that new period likewise applies from the beginning of that period.” This paragraph provides that, where the lease agreement contains an increase clause, the action may be brought up to the end of the lease period in question.

Under that provision, the month from which the rent takes effect is determined by the period in which the action was brought, or in which written notice of the increase was given to the tenant.

Competent Court and Venue

As to the court having subject-matter jurisdiction in a rent determination action, Article 4 of the Code of Civil Procedure provides: “(1) Civil courts of peace shall hear, irrespective of the value or amount in dispute: a) all actions concerning disputes arising out of a lease relationship in respect of leased immovable property — including actions for debts arising out of the lease relationship, but excluding the provisions on eviction by enforcement without judgment under Enforcement and Bankruptcy Law no. 2004 of 9 June 1932 — and actions brought against such actions,” Civil courts of peace therefore have subject-matter jurisdiction. As to territorial jurisdiction, Article 6 of the Code of Civil Procedure provides: “(1) The court of general jurisdiction is the court of the place of residence of the defendant, whether a natural or legal person, at the date the action is brought.” and, in addition, Article 10 provides: “(1) Actions arising out of a contract may also be brought in the court of the place where the contract is to be performed.” so that the court of the place where the immovable property is situated also has jurisdiction.